Industry group slams bill allowing BC Hydro to buy U.S. power

By Shannon Waters July 6, 2020

Small-scale power producers in B.C. are raising alarm bells about proposed amendments to the Clean Energy Act that would allow BC Hydro to buy power from U.S. sources.

The current law, which was passed in 2010 under the BC Liberal government, requires BC Hydro to contract enough power to meet forecast demand “solely from electricity-generating facilities within the province.”

But Bill 17, Clean Energy Amendment Act, could see that go out the window.

The legislation would “allow BC Hydro to consider out-of-province options when it plans how it will meet future demand,” Energy Minister Bruce Ralston said when he tabled it last month.

The goal is to ensure the utility can provide power “at a lower cost and keep rates affordable,” but green energy providers say the province should be bolstering its own energy industry before looking south of the border.

“Frankly I can’t think of an industry where the objective of government is to import things that we can produce,” Laureen Whyte, Clean Energy BC’s executive director, told BC Today in an interview.

Independent power producers (IPPs) currently supply about one-quarter of BC Hydro’s power load via more than 120 long-term contracts.

Whyte says the shift away from energy self-sufficiency will halt the development of new IPP projects and leave companies — many of which involve Indigenous investment or ownership — in the lurch once their contracts run out, dialling up uncertainty that began last year when the province announced the suspension of BC Hydro’s standing offer program.

Industry ‘confused’ about province’s disjointed clean energy plans
Last year’s government-commissioned review of the standing offer program concluded that BC Hydro is paying too much for power produced by IPPs and recommended its procurement process be terminated.

Existing contracts obligate BC Hydro to buy what the report calls “surplus power” at prices that cost each residential ratepayer about $200 per year — or $4,000 over the 20 year term.

Whyte admits the IPP agreements signed 10 years ago were costly but said it was because producers were assuming a lot of risk on new green energy projects, and, unlike other provinces, B.C. provided no subsidies.

However, the cost of wind and solar projects are on the decline.

With BC Hydro’s 20-year energy demand forecast due next February, Whyte worries the utility is underestimating the level of power demand for future years, especially as the province moves toward implementing the targets laid out in CleanBC.

“What’s surprising to me is that, other than electric vehicles, they are not including the increased demand that would happen if they implement CleanBC targets,” Whyte told BC Today.

Those targets include shifting much of the province’s transportation industry — from ferries to trucks — to cleaner forms of energy, most of which will likely rely on electricity.

“On both counts — the economic development end of things and also in terms of long range forecasting — we’re confused,” Whyte said.